Changing Channels: Rethinking Your Approach to Financial Health

Money.   Now there’s a word that inspires a vast range of feelings in virtually everyone.  For some, it may just cause a sense of queasy anxiety while others may feel unbridled terror when thinking about it.  Often, unfortunately, it may lead many to just bury their heads in the sand.  When they finally muster the courage to take a peek at their financial status, they hope that the sun will be miraculously shining and all will be well.  For artists and other freelance workers operating outside of the ‘normal’ work trajectory this can be particularly problematic.  Too frequently, the bewildering confusion of trying to navigate financial waters that don’t relate to their lifestyle can create harmful roadblocks to progress in their chosen field.

Changing the way you think about certain financial elements can help to overcome some of these obstacles and set you on a calmer and more productive path to financial wellness.  One of the wonderful qualities we have as artists and freelancers is our ability to think creatively—to see problems from different angles and then come up with a procedure that will help us to solve them.  Applying that strength to some uncomfortable financial issues will open up new channels to explore that will support rather than obstruct your endeavors.

Consider the idea of putting yourself on—and sticking to—a budget.  Budgeting often carries an onerous aura about it—you must be depriving yourself of something if you are on a budget, right?  Changing your perception of what being on a budget means can help change the experience to a positive and affirming choice.  For those of us with fluctuating levels of income from month to month, budgeting can be a key tool in overcoming the ‘feast or famine’ mentality—over spending during high-income periods and then unhappily skimping during lower income periods.  Creating a budget for yourself in which you spend the same amount each month will prod you into feeling like someone receiving a regular salary.  The benefit you reap is that in months when your paycheck to yourself is less than your earnings, you’ll be accumulating the excess funds to either use in less flush months or to invest in assets.  The task of keeping to your budget will seem much less onerous as you see these ‘extra’ funds start to accumulate.

Next, let’s think about investment assets that you know you should be building, but instead defer to some day in the unspecified future, which never seems to arrive.  To justify this procrastination, you may think of investments as just tying up money that could be used for more immediate needs.  Or, you may view them as funds that would be too far out of reach for comfort.  Instead, try thinking of investment assets as another one of your clients—they can be providing future income to you just as any other paying gig can.  There are several types of investment assets that produce regular streams of income, such as bonds and dividend stocks.  These can be easily purchased either individually or through a mutual fund or exchange-traded fund.  Another type of income producing investment is real estate investment trusts, commonly known as REITs, which must primarily hold real estate assets.  They are also required to pay out at least 90% of their taxable income to shareholders each year.  Building up positions in these types of revenue generating assets will result in creating a source of revenue which can be either reinvested or used, depending on your income flow at any given time.  The fact that these are passive investments will also preclude you from having to deal with client whims related to them—certainly an additional plus!

Finally, try to eliminate the notion that you can only start to invest when you have a lot of money.  This mentality will only lead to delaying the building of any type of invested assets, which always works against you.  Compounding, a wonderful force in which the reinvested proceeds from your investments earn proceeds themselves, amplifies over time.  The longer you allow this geometric progression to work for you the better.  Starting to invest even small amounts sooner rather than later allows more time for your assets to benefit from compounding.  Virtually all of the core investment asset types have vehicles that will allow you to begin building assets with limited initial input.  Commit yourself to starting the process of saving and investing by making a regular payment to yourself—even if it is just a few dollars at the beginning.  Over time, seeing these assets grow will motivate you to save even more.

Providing yourself with a level of comfort and security in your finances—even with varying and uncertain income levels—is attainable.  Rethinking some of your perceptions about money and investing will help you channel your energy into positive actions.  This in turn will help to allay some fears and uncertainties with regard to your financial well-being, and allow your assets to support your endeavors rather than hold them back.  Invest in yourself—the rewards are waiting for you!

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